Print out this S&P500 chart and pin it to the wall!
14th December 2018 11:35
by Alistair Strang from Trends and Targets
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Looking at one of the world's most important indices, technical analyst Alistair Strang believes things are now starting to make sense.
We last reviewed this over a month ago. Rather surprisingly (the S&P is usually reliable) very little of significance has happened in the period since.
As with everything else, we suspect the UK's political hiatus is provoking a worldwide effect. If we take this approach and now employ a trend since the UK's Brexit vote, things start make some sense.
Circled on the chart is a short-lived spike below red, the Brexit uptrend. This sort of thing is usually worth paying attention to, often signalling coming danger. Essentially, it's a warning that the uptrend can be broken.
In the case of the S&P500, weakness now below 2,580 will be regarded as triggering travel down to an initial 2,500 points.
If broken, secondary is at 2,467 points. While we expect a real bounce, should 2,467 appear, anyone going for a long position is advised stop needs to be at 2,450; quite wide when chasing a bottom rebound. The additional problem comes from a longer-term issue.
In the event the S&P now closes below red, it enters a zone with a logical 'eventual' bottom calculating at 2,213 points.
Very rarely, when we produce these reports, do we suggest printing it out and pinning to a wall. This, unfortunately, is one of these times. The S&P needs better than 2,755 to nonsense this developing scenario.
Source: Trends and Targets. Past performance is not a reliable indicator of future results
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